Arqit Quantum Inc. Q4 FY2025 earnings call

• Fiscal 2025 was a year of building momentum with increased customer engagements, revenue, and contracted backlog. - Broadened product and service footprint via acquisition of Amplify's encryption intelligence product and risk advisory services. - Collaborations with Intel and Sparkle to expand product solution sets, including confidential computing. - Successes in telecom market with contracts like the three-year deal with Sparkle and additional licenses with RSG Telecom and Fabric Networks. - Progress in defense market with multiple contracts, including one for integration into unmanned battlefield assets. - Recognized that the market is moving from awareness to action regarding post-quantum encryption.

For fiscal year 2025, revenue from Arqit Quantum Inc.'s platform SKA platform as a service and Network Secure products totaled $476,000. Professional services and maintenance revenue in support of contract activity was $54,000. In fiscal year 2024, SKA platform as a service and Network Secure contracts revenue totaled $191,000, and professional services and maintenance in support of activity was $102,000. The revenue from product segments contributed to the overall financial performance for the year.

• Fiscal 2025 was a trough year revenue-wise but showed material improvement from prior year and sequential growth. - Ended fiscal year 2025 with $1,200,000 in executed contracts that could be recognized in fiscal 2026. - Expect to build on momentum in 2026. - Plan to maintain OpEx control with a target maximum cash spend per month of $2,500,000.

• Includes forward-looking statements and disclaimers about actual results differing from projections, as per SEC filings. Risks related to market adoption of post-quantum encryption solutions and potential delays in sales cycles, especially in defense.

Q: Is there a particular catalyst driving higher level of demonstrations and activity?

A: The news flow on quantum advances, such as IBM and Google achieving quantum supremacy, and governments/regulatory bodies highlighting the need to address quantum threats are catalysts. Also, the 'harvest now decrypt later' threat is driving action.

Q: What's the sales cycle like for encryption intelligence vs legacy product?

A: Encryption intelligence has a shorter sales cycle, with telco operators using it for ongoing network checks. It helps identify vulnerabilities and aligns with regulatory guidance.

Q: Any additional bolt-on opportunities similar to Amplify acquisition?

A: Potential opportunities in data sovereignty and confidential compute areas, as these align with the detect, protect, comply framework.

Q: Anticipated change in OpEx for fiscal '26?

A: Plan to maintain OpEx control with a target maximum cash spend per month of $2,500,000.

Q: Touch on competition?

A: Arqit has been working on this for over 5 years with 25 patents, offering a unique symmetric key agreement solution that's light, flexible, and addresses data sovereignty and trusted domain needs.

Q: Corporate side adoption?

A: Regulated, critical infrastructure, IP-heavy companies, and financial services are starting to engage, as they need to protect against 'harvest now decrypt later' threats and comply with regulations.